Monday, September 12, 2011

Jobs. This seemingly simple word is used more frequently in the press than Charlie Sheen says he's "duh, winning." What is a job? Well, as we discussed in class last week it seems to be an agreement between an employer and an employee that calls for an exchange of a service for some sort of compensation, most commonly money. This means that the employer must count a "job" as a cost instead of income because he is giving out money against his gross income. This leads us to a very interesting question. President Obama claims that his "job creating" plan will cost $447 billion, but if all these "jobs" he is creating are in reality, costs to the companies, how much will President Obama's "job creation" plan cost? Who knows? Who cares? I know the President doesn't. $447 billion is chump change for this administration. But in all seriousness, this "job creation" plan that is so "common-sense" is going to cost a TON. And on a side note, what is the President doing submitting a bill to Congress? Last time I read the Constitution, that responsibility falls to the House of Representative and the Senate, not the Commander-in-Chief, but who reads that silly little book these days? Nerds.

Another part of President Obama's plan is to extend unemployment benefits. I am not going to sit here on my throne as an employed citizen of this country and call out every single person receiving unemployment benefits as lazy and the beginning of the end of this great country. I will say that by extending unemployment benefits people are less incentivized to change. Some people, I say SOME, not ALL, have reached a locational equilibrium. They are fine with receiving unemployment, will fill out the required job applications to receive the benefits, and go about living life. They believe that their utility in their current situation cannot be maximized any better than how they are living. While this is not everybody on unemployment, it seems to be that in our study of economics, this would seem to be an unintended side effect of such a program.